Do you ever wonder why some people are becoming more and more successful every day without any major falls even when there are multiple barriers?
Some people say it’s their luck. But rather than saying it’s luck, I would say it’s all about their strategies.
Having a solid plan is the key to any success story. However, what if your plan got fail just because of some irrepressible reason, even it’s well established?
This is where your contingency plan comes into play.
What is a Contingency Plan?
A Contingency Plan is a set of instructions that you will follow whenever there is an unforeseen or unexpected situation. You can call it a backup plan or plan B.
Why should you have a Contingency Plan?
Let’s say you have a super detailed and perfect plan for your future. For example, you have a nice job with a good salary and you have your own house and a car. Your plan is within the next five years get promoted and upgrade your lifestyle. However, because of some unavoidable reason just like a pandemic, you lost your job or they have cut down your salary. What will happen to your plan as well as your future? If you had a contingency plan you would have known what to do in those types of scenarios or how to survive without collapsing.
Uncertainty is inevitable in any circumstance. There are multiple unavoidable situations that we might have to face such as climate changes, sudden fire, financial crisis or having sudden health issues. It’s a must of having a contingency plan if you want to survive without being panic.
Benefits of Contingency Plan
• Helps to reduce the risk of uncertainty
• Helps to continue your work
• Save time and cost whenever there is an unavoidable situation
• Work as a life saviour
• Gives you confidence
• Helps to minimise the damage
How To Create a Contingency Plan?
Making a good contingency plan is not that simple and it’s equally important as your main plan because if your main plan doesn’t work, this will be your next plan. There are few steps you can follow when you make your Contingency Plan.
- Brainstorm and list down all the possible risks that could occur.
Here you can ask few questions in order to make the process easier.
- How likely it would go wrong?
- What’s the impact and consequences of the contingency?
- What should be your reaction or solution?
- How can you prepare for it in advance?
- What could possibly go wrong?
- Prioritise the risks
Use the above list and rank the risks based on their possibility, impact and likelihood. It’s up to your situation to decide how much weighting to put on each risk. Use all recourses to gather information when you analyse the risks. You can use financial reports or predictions from finance experts to identify the risk of ongoing financial situations. Likewise, make sure to gather all the possible information that you could find because your contingency plan could be your life saviour.
- Create a plan
Make a plan according to the potential risks that you have prioritised earlier. Your key focus should be on minimizing losses. Make realistic instructions or guidelines for what to do in case an event has occurred and how to handle the situation
If your contingency plan involves other people, you can share it with them now. If it has actions or precautions that need to be done immediately, execute them.
- Revisit and review
Things are changing over time and the impact of your prioritised risks also may be high or less. Therefore, it’s essential to regular reviews and adjusts your plan accordingly.
No matter how perfect your main plan is, there is a possibility that your plan may not work as you thought just because of some unavoidable situation. It’s always better to have a backup plan or a contingency plan with you to make sure you are safe and secure.